Israel’s regulator gets prepared to open its wholesale electricity market to competition

14 - 15 May 2019

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The Israeli Electricity Authority (PUA) got trainedin a two-day course facilitated by MEDREG in Jerusalem on 14 and 15 May, on how to create an adequate market design.

On 3 June 2018, the Israeli Government decided to reform the electricity market and change the structure of the electricity market. Within the framework of the decision, it was determined that the several generation sites would be sold to private generators starting from 3 December 2019, and continuing in the coming years. Pursuant to the decision, the Electricity Authority has to determine competitive regulations for the new electricity market and design a regulation that will establish an independent system operator and its licences.

The new regulations outline the initial foundations of the future electricity market that will be set up through competitive processes.

The PUA's new regulation is based on competition in the energy markettogether with fixed payments to guarantee the availability of electricity.

As a consequence, PUA is looking at deepening its staff’s knowledge concerning the creation of an adequate market design in terms of capacity, energy mix, grid access and mainly the operation of an independent system operator working.

To answer that need, MEDREG has designed a 2-day training session for PUA’s staff, with the aim to enhance their understanding of the electricity market framework in Europe that can provide guidance on how to address the market reform currently taking place in Israel.

Dr. Assaf Eilat, Chairman of PUA stated: "The comprehensive MEDREG’s training helped us learn from the European experience in order to facilitate a more competitive and efficient market structure in the Israeli market. Learning from our colleagues' experience is a crucial element in forming an advanced Israeli electricity market that operates in line with modern global practices."

The training, entitled “The Economics of Regulation: Moving from Monopolies to Competitive Wholesale Electricity Markets” saw the contribution of academics, practitioners from the Irish and Turkish regulators, representatives from the Mediterranean Transmission System Operators (Med-TSO) providing their vision of what market rules, market structures, and legal and regulatory institutions are necessary to establish a competitive wholesale market that provides the maximum possible benefits to consumers consistent with the long-term financial viability of the industry.

More specifically, the Israeli participants learnt about how wholesale electricity markets evolve over time and how to coordinate them with regulated segments. The training also provided hints on how to evaluate price formation to balance demand and supply, how to monitor the market and evoked the design of renewables support mechanisms.

As previous MEDREG trainings, the course combined theoretical presentation with practical group exercises. The Israeli participants learnt about how wholesale electricity markets evolve over time and how to coordinate them with regulated segments. The training also provided hints on how to evaluate price formation to balance demand and supply, how to monitor the market and evoked the design of renewables support mechanisms.

Attachments

Association of the MEDiterranean REGulators for Electricity and GasContacts & Social